The private sector is cool to China's big infrastructure push

Beijing trumpets its 'Belt and Road' but may end up footing the bill

ISSAKU HARADA, Nikkei staff writer

BEIJING China has used the first international conference on the Belt and Road Initiative, its huge international infrastructure push, to tout the project. But support from the private sector is tepid.

In a joint statement on May 15, leaders in the Chinese capital acknowledged that global trade and investment growth is sluggish. "We reaffirm our shared commitment to build [an] open economy, ensure free and inclusive trade, [and] oppose all forms of protectionism," the statement said, according to Chinese state-run news agency Xinhua. The initiative has "achieved positive outcomes" by "providing important opportunities for countries to deepen cooperation," the statement said.

A second forum will be held in 2019, Chinese President Xi Jinping told a news conference after the event ended.

China sought to nudge a number of stalled projects forward while the conference was in session, signing a deal on May 14 to finance an Indonesian high-speed railway, and making progress on a deal to build nuclear reactors in Argentina. Xi announced a total of 780 billion yuan ($112 billion) in new funding for the initiative, including a "Silk Road Fund" and loans from state-backed banks.

But investment in Belt and Road projects has been modest so far. Private companies have balked at putting up money, believing the risks outweigh potential returns. Chinese state-owned enterprises are thought to have committed the majority of funds so far.

The initiative's future appears murky, particularly as China's structural economic troubles deepen. An official at a multilateral development bank said there are very few projects in developing countries under the initiative that it could invest in.